Petro Matad still working to secure Mongolia approvals

The AIM-traded firm said preparation was underway to finalise the Heron 1 well for production once approvals weer granted and contractor crews returned to Mongolia.

Efforts were also directed towards urging the central government to expedite the certification process for Block XX, designating it as ‘State Special Purpose Land’.

The board said the designation aimed to streamline future permitting processes and mitigate the risk of interference or obstruction.

At the same time, Petro Matad's renewable energy joint venture SunSteppe Renewable Energy (SRE) had achieved significant milestones.

An exclusive memorandum of understanding had been inked with Oyu Tolgoi mine for a green hydrogen project, supported by grant funding from the Japanese government.

Additionally, SRE's 50MW battery energy storage system project had received technical approval, advancing Mongolia's renewable energy infrastructure.

On the operational front, progress was continuing despite challenges.

Land access approvals for 2024 operations were progressing, paving the way for the completion of the Heron 1 well.

Petro Matad said it was poised to compensate herders affected by the Block XX exploitation area.

While the certification process for Block XX faced delays due to the Provincial Governor's refusal to sign off on key agreements, Petro Matad said it remained resolute in its push for completion.

Cooperation with relevant agencies was persisting, with legal recourse under consideration if necessary to ensure operational continuity in future years.

The board said the renewable energy sector in Mongolia was seeing a surge in activity, with SRE spearheading transformative projects.

“We are pushing to secure approval from Matad Soum for the land access required to execute our 2024 work programme and we are gearing up for operations during the summer,” said chief executive officer Mike Buck.

“The negative reactions to the committee's decision and misinformation spread by activists were not unexpected and underline why the central government certification process is so important for the long term and is our preferred solution.

“However, with 2024 parliamentary elections looming and central government moving slowly, we are pursuing the local solution as a priority. We are also pushing the central government hard to resolve its internal issues which have created the frustrating obstruction of the state special purpose certification process for Block XX.”

Buck said the company would buy itself a “long-delayed operating window” with the local approval for 2024 if it can get it, but added that it did not want to go through such a process every year.

“Separately, the progress made by our renewable energy joint venture is very pleasing and to see it so quickly in partnership with Japan's OECC and involved with the decarbonisation of the globally significant Oyu Tolgoi mine is testament to the credibility, professionalism and motivation of the team.”

At 1424 BST, shares in Petro Matad were down 11.04% at 2.98p.

Reporting by Josh White for Sharecast.com.